According to Microstrategy’s Michael Saylor, the Turkish economy may “prosper” despite the lira’s demise. To meet this requirement, they need to use bitcoin.
The Turkish lira has been depreciating against the dollar for several months. The Turkish lira has lost almost 20% of its value since the beginning of 2018, leading to a spiraling decrease in people’s buying power. The situation is not likely to improve any time soon, as Turkey is facing higher interest rates, an increasing trade deficit, and new sanctions constraining the country.
Turkish President Recep Erdogan declared war on bitcoin in September of this year. For now, MicroStrategy’s Michael Saylor advises nation inhabitants to transfer their funds into bitcoins to preserve their buying power.
However, Saylor’s concept is no longer new. Those who live in nations with excessive inflation (or hyperinflation) have long recognized that they are fleeing their national currency into other things that have worth. Dollars are often used, although bitcoins have only been around for a short time.
Although Bitcoin’s price has been fluctuating wildly, it still provides stability to countries with high-inflation rates. In contrast, Turkey has had a volatile central bank interest rate environment of late, which is hurting their economy.
Even politicians notice the above, although they do not always understand the essence of the problem. And so, for example, the Venezuelan authorities in response to hyperinflation introduced their digital currency in an attempt to stabilise their economy.
The new currency system was introduced to the country but it has been largely unused with most local residents preferring to use Bitcoin or cash.
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